Allocation of coal blocks done under screening committee rule and government dispensation suffers from illegality, says SC.
In a ruling that may come as a blow to several companies, the Supreme Court on Monday deemed all coal block allocations made between 1993 and 2009 as illegal. The court said that it would appoint a high-level committee of retired judges to identify those who will be affected by its order.
The bench will address the issue of the legal consequences of its ruling on the next hearing on September 1, 2014, when it creates a committee to identify those whose allocations will be cancelled. It also also address the route through which these allocations may be henceforward made.
The Supreme Court said, "Allocation of coal blocks done under screening committee rule and government dispensation suffers from illegality." "All allocations were done in an illegal manner and suffer from vice of arbitrariness," the court ruled.
The apex court went on to add, "No objective criteria was followed and guidelines were breached in coal block allocations." "The coal block allocation done by screening committee was not fair and transparent," it added.
A bench, comprising CJI RM Lodha, Madan Lokur and Kurian Joseph, said that all allocations done in all 35 meetings of the committee were ad hoc, casual and hence unfair.
Some 194 allocations were made through the screening committee and another 36 through the government dispensation route.
Amit Anand Tiwari, a lawyer for the Central Bureau of Investigation (CBI) that is also investigating illegalities in coal mine allocations, said wrongful grant of blocks had cost the public exchequer $4.8 billion.